Queensland RFA: Mandate shouldn’t result in higher pump prices

By Queensland Renewable Fuels Association | December 02, 2016

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Claims from consumer advocates that Queensland motorists will pay millions more for fuel each year after the introduction of the state government’s ethanol mandate are misleading and misinformed, said Larissa Rose, Queensland Renewable Fuels Association managing director. Queensland motorists should not expect to pay more at the pump due to the state’s ethanol mandate, Rose said.

Beginning in January 1 2017, large service stations will be required by law to ensure that 3 percent of their total regular and ethanol-blended petrol sales each quarter are bio-based, such as E10. The minimum target for ethanol will rise to 4 percent in 2018. Biodiesel is a part of this mandate and requires 0.5 percent of all diesel fuel sold to be bio-based diesel. A report from the Australian Competition and Consumer Commission this week found that a similar mandate in force in NSW since 2007 had reduced consumer choice and forced drivers to buy more expensive premium 95 or 98 unleaded petrol.

However, Rose said the comparison of the Queensland and NSW mandates was misleading.

"When NSW introduced its mandate in 2007, consumers were unsure about filling up with E10, which caused them to purchase premium grade fuels, therefore raising fuel sales in those categories," she said. “Because there was minimal consumer education about the environmental benefits of E10 and its capacity to give consumers a safe higher-octane fuel at a lower price for their vehicles, misperceptions in the marketplace occurred, leading to a significant increase in consumers choosing the premium fuels, and therefore paying more.”

In Queensland, however, motorists will still have the choice to use 91 unleaded petrol in their vehicles after the introduction of the ethanol mandate in 2017, meaning they don’t have to change their fuel consumption habits or expenditure at all if they don’t want to.

“What we need to do is ensure there is consumer education to remove the stigmas about biofuels and help consumers make an informed and aware choice at the purchase point. But for consumers who choose to continue using the same fuel they have always used, there will be no significant price impact as a result of this mandate,” Rose said.

“Biofuels reduce carcinogenic tailpipe emissions as concluded by the CSIRO/Orbital Research Report (2008), that using E10 decreases the lung embedding particle PM2.5 by 33 percent. Using biofuels also supports Queensland agriculture by investing in our grain and sugar producing regions to produce ethanol domestically. That can

“Reports like this one from the ACCC, which aren’t taking into account the significant differences between the Queensland mandate and NSW legislations are misleading and unhelpful. The ethanol mandate is a positive for motorists because it keeps Queenslanders dollars in the state, not overseas. It builds regional domestic-sourced fuel security and delivers cleaner air. It is our goal to ensure that motorists are aware of the benefits of biofuels and empowered to make the decision to purchase biofuels at the bowser (pump),” Rose said.